Working Paper: NBER ID: w21588
Authors: George J. Borjas
Abstract: This paper brings a new perspective to the analysis of the Mariel supply shock, revisiting the question armed with the accumulated insights from the literature on the economic impact of immigration. A crucial lesson from that literature is that any credible attempt to measure the wage impact must carefully match the skills of the immigrants with those of the pre-existing workers. At least 60 percent of the Marielitos were high school dropouts. A reappraisal of the Mariel evidence, specifically examining wages in this low-skill group, overturns the finding that Mariel did not affect Miami’s wage structure. The wage of high school dropouts in Miami dropped dramatically, by 10 to 30 percent, suggesting an elasticity of wages with respect to the number of workers between -0.5 and -1.5.
Keywords: Mariel supply shock; wage impact; immigration; labor market; high school dropouts
JEL Codes: J2; J31; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Marielitos influx (F24) | wage drop for high school dropouts in Miami (J31) |
| Marielitos influx (F24) | relative wage decrease for high school dropouts in Miami (J31) |
| Marielitos influx (F24) | significant wage drop for low-skill workers in Miami (F66) |
| wage drop for low-skill workers in Miami (F66) | recovery by 1990 (E65) |
| Marielitos influx (F24) | widening wage gap for high school dropouts in Miami (J31) |